When Heidi Hartmann, president of the Institute for Women’s Policy Research, was young, her divorced mother was barely able to keep the family going with her wages of $10 an hour, so she didn’t start putting money toward retirement until the age of 50.
Still, by the time Hartmann’s mom retired, she had managed to save $450,000.
“You can save at any income level and time of life. My mom is a good example,” Hartmann said Tuesday, July 27, at a panel discussion on women and personal finance at The Paley Center for Media in New York.
Also on the panel were Lynnette Khalfani-Cox, a personal finance expert and former Wall Street Journal columnist known as The Money Coach, and Joan Cleveland, a senior vice president of business development for Prudential Financial’s individual life insurance unit. They had joined with Hartmann to discuss the findings of Prudential’s study, “Financial Experience & Behaviors Among Women,” the fifth such study since 2000.
Hartmann, who has a doctorate in economics from Yale, noted that she was grateful for her now 90-year-old mother’s example in pursuing a career and building her personal wealth. In addition to having founded her policy-oriented research institute in 1987, Hartmann is also a research professor at The George Washington University and in 1994 received a MacArthur Fellowship Award for her work in the field of women and economics.
“A college education is the best investment you can make,” she said. “Half a century of financial progress for women is hard to ignore.”
As more American women than ever are college-educated and actively participating in the workforce, they are increasingly involved in household financial decisions–at a rate of 95%, according to the Prudential study. And yet, two-thirds of women still don’t have a financial plan in place, and many still lack confidence in their financial decision-making abilities. Indeed, this confidence gap between knowing that financial goals should be reached and feeling certain about what must be done to reach them is a consistent trend over the course of the 10-year study.
Trust Issues Lead 60% of Women to Seek Advice From Friends and Family
“We found that many women are just not confident in making decisions,” Cleveland said, noting that while many of the women surveyed understood workplace retirement plans and IRAs, more sophisticated products such as mutual funds, annuities, and long-term care insurance remained a mystery. “But they could really stand to work with a financial professional. The financial crisis has made them reconsider their goals.”
As a result, she added, six out of 10 respondents in the study said they turn to friends or family for financial advice because those are the people they trust.